Monocytes and macrophages express CD4 on their surface and are targets for HIV. Infection of phagocytic cells is not cytotoxic, and these chronically infected cells may serve as a reservoir for HIV. Continued characterization of the functional abnormalities of this population is essential to understanding the immunosuppressed state of AIDS patients. Recent studies have demonstrated that HIV infection induces production of a cytokine unique to monocytes and macrophages: the interleukin-1 receptor antagonist (IL-1ra). This cytokine is secreted by activated phagocytes, binds to the IL-1 receptor, but does not transduce a signal. IL-1ra is unique in that it is the only known endogenous receptor antagonist. By binding to the IL-1 receptor, IL-1ra attenuates the pro- inflammatory actions of IL-1. Monocytes produce both IL-1 and IL-1ra, and the relationship between these two cytokines is crucial to maintaining the proper balance between immune cell recruitment/activation and immunosuppression and tissue repair. In addition to influencing immune status, infected monocytes serve as a reservoir for HIV-1 favoring selective therapeutic targeting of this population. Interaction of HIV-1 with cell surface CD4 transduces a signal inducing secretion of cytokines, and also de novo expression of activation antigens. For example, monocytes from HIV+ individuals maybe CD16+ and IL-2R+ in contrast to monocytes from control subjects. The emergence of IL-2R on infected cells provides the basis for targeted toxins. Current studies are focusing on other alterations in the expression of antigens and surface receptors as selective toxin targets for therapeutic intervention.